Tax legislation, regulation and guidance: law and discretion

The increasing complexity of the tax system and the legislation through which it is implemented results in major problems of interpretation, application and risk management for taxpayers and tax authorities alike. Building on previous work at the Centre on the regulation of large corporate taxpayers, this project investigates methods of legislating, such as principles-based drafting, general and targeted anti-avoidance provisions and the consequent need for extrastatutory guidance, which may be partially concessionary and therefore of  questionable validity, or may even require taxpayers to look beyond legal requirements, as does the Bank Code. The degree to which guidance can be binding and enforceable through the courts, using public law remedies, is questionable, whilst the use of codes to require compliance with the interpretation of legislation by the revenue authorities rather than the courts raises questions about the limits of the legitimacy of persuasion as a tool to achieve compliance.

Judith Freedman